STATE BUDGET ANALYSIS - CALL TO ACTION
March 31, 2014
The state budget agreement to be voted on today adds hundreds of millions of dollars in GEA reduction and other flexible aid for schools. While it falls far short of full funding for our schools, it is a marked improvement over the Executive Budget proposal and is the largest post- recession increase to date. In total, the state budget will add $1.15 billion in new aid, including full funding of BOCES, Building, Special Education and Transportation Aid at an increase of $267 million. It increases Foundation Aid by over $250 million and reduces the GEA by $602 million, leaving $1 billion of the GEA still affecting future school aid payments. It is perhaps ironic that the amount of aid the state increases and the amount it continues to withhold from schools are virtually identical. Beyond traditional school aid, $300 million was added for pre- kindergarten programs in New York City and $40 million throughout the rest of the state. More than $132 million in targeted aid will also be provided to individual school districts, at the direction of the legislature. Following the increase, the share of school aid provided to New York City will be 39.8%. Long Island will receive 12.2% of total state aid and the remainder of the state will receive 48%. State aid was increased over 2% from the Executive Budget proposal, for a total increase of 5.3% over the current year.
Beyond state aid, the budget was notable both for what it does and doesn’t do for (and to!) school districts. Several NYSSBA legislative priorities were included in the budget agreement. First, a moratorium was placed on the recalculation of Building Aid for one more year. This is the second year that NYSSBA has worked to protect school districts from reduced Building Aid due to a recalculation of interest rates. This year, the moratorium will save districts over $40 million. In addition, the state comptroller now has authority to audit charter schools (outside New York City) in the same manner that he audits traditional public schools. (The City Comptroller will do the audits in New York City.) School districts will be the lower charter school tuition rate of either 2010-11 rates or the current rate and to freeze that rate for three years. Individual school districts facing dire circumstances were also helped by the final agreement, including Marlboro, Liverpool, Panama, Schenectady, Albany, Roosevelt, Valley Stream and Yonkers. Districts that choose to consolidate will be able to either delay the new tax rate for one year or amortize the new tax rate over ten years (relieving one of the largest barriers to merging.) Excess EBALR funds can once again be used flexibly by districts and school districts will now receive the public assets of charter schools that cease to operate. Authority to issue Requests for Proposals rather than straight competitive bidding for transportation contracts was made permanent and the ability of districts to base their transportation plans on actual ridership was extended for five more years.
Conversely, the state budget agreement was rife with missed opportunities. Beyond failing to rid school districts of systematic underfunding through outright elimination of the GEA, the state budget ignored the desperate financial needs of special act districts. Both legislative houses included assistance in their “one house” versions, but they could not reach agreement on an approach. State leaders also failed to uphold their commitment to “significant mandate relief” by not following through on special education waivers. The closest the budget comes to mandate relief is eliminating the requirement of parental approval for a 12 month educational program. It also failed to provide authority to create regional high schools and allow long term leases for BOCES. In addition, it fails to extend BOCES’ ability to contract with the Office of Children and Family Services.
However, the budget agreement also rejects a number of problematic proposals. NYSSBA advocated strongly against a moratorium on the use of student test scores in APPR agreements, as it would have disrupted the hard won, collectively bargained agreements required by the state. The state did impose a moratorium, but it covers only the use of student test scores for use as the primary factor in making student promotion placement decisions. Plans to provide Building Aid to charter schools throughout the state was rejected, at NYSSBA’s urging. In a major advocacy victory, hundreds of millions of dollars in public funds will not be provided to private and parochial schools through tuition tax credits. The legislature’s rejection of this proposal is largely responsible for freeing up funding for increases in school aid.
The final budget agreement also rejects making the tax cap permanent. A proposal to create a Family Medical Leave law was rejected after NYSSBA pointed out the school district cost and disruptive educational impact of replacing teachers with substitutes. The governor’s plan to subject school districts to the Division of Human Rights (DHR) was rejected by the legislature as well. This allows districts to continue addressing student behavior with the best interests of all parties in mind. Claims adjudicated by DHR have historically not taken the interests of all students into account. Similarly, new reporting mandates relating to the Dignity for All Students Act were rejected. These were major NYSSBA priorities and their successful rejection is a significant victory for local school authority.
The deal includes a number of revisions to the implementation of the Common Core Learning Standards that were urged by NYSSBA. The use of third party providers like InBloom was rejected, but the Regional Information Centers of BOCES may be used by the state to house student data. Individual school districts may continue to contract with third party providers, while the state is prohibited from doing so. . The state used a tempered approach to district student privacy protections, where districts themselves (not parents) can select whether to “opt out” of sending student identifying information to the RICS or BOCES, through SED. NYSSBA’s concern that any new privacy rules not interfere with the operation of school districts was heeded by state leaders. The state imposed a number of requirements on SED (designed to address Common Core implementation issues) like increasing the number of questions released after each exam and educating parents and the community about the Common Core. Sadly though, similar to its approach to allowing districts to use RICs for data storage, it failed to provide any funding to accomplish the goals. In fact, it suggests that Race to the Top funding be used, but this use is specifically prohibited under federal regulations.
Similarly, the state has now directed the commissioner to impose restrictions on pre-kindergarten through grade 2 testing and a cap on total time spent testing. Test scores will not be included in permanent student records for grades 3-8 and students with disabilities will now be tested at their developmental, rather than their chronological age. English Language Learners can now be tested on their progress, rather than their proficiency for two years. Both of these initiatives are subject to the state securing a federal waiver. APPR revisions that only address an attempt to reduce testing time will receive an expedited approval process, with a decision relayed within 10 days. The state will now create testing transparency reports to every district that detail all tests administered in that district by either the state, the federal government or the district itself. The state will now employ a “chief privacy officer” to ensure the protection of student identifying information and parents will now have a Bill of Rights that will be created by SED and required to be posted on district websites, along with a statement that the district is complying with SED privacy rules. Vendors who experience security breaches will be forced to promptly inform districts and SED and there will be penalties for breaches that result from gross negligence. Third parties who are responsible for a breach of student data security will be held liable for the cost of notification to all involved parties.
Property tax rebates to homeowners in school districts that propose budgets at or below the tax levy limit were included in the final agreement. In the first year, homeowners would receive an amount equal to the increase over the previous year. The second year would retain the requirements of the first year and add the need for a plan on reducing the tax levy by 1% in subsequent years. (Schools would need to see the savings by 2016-17, but the originally proposed plan to withhold state aid for those who fail to carry out their plan has been eliminated.) Credit for past savings attributable to shared services will be provided and each individual school district will be responsible for arriving at their own savings plan. Their plans will not be tied to other districts or localities as originally proposed. This alleviates the prospect of having your own district secure the required savings but have the region fail in its attempt.
Inexplicably, the plan does not provide credit for school districts that share services with other municipal governments. The result of the current plan virtually assures passage of those district budgets that stay below the cap this year. But, without significant new state aid, actually reducing the tax levy in subsequent years may be impossible and place undue pressure on districts that have already exhibited marked fiscal restraint. Perhaps most significantly, the tax rebate program incentivizes school districts to do what they already intended to do. With this amount of increased aid, only a handful of districts will find it necessary to pierce the cap. Even before the tax cap became law, school districts had limited their spending to the level the cap now demands. As a result, a billion dollar program to encourage spending restraint would appear gratuitous, draining funds desperately needed for further reduction of the GEA.
The proposal to place a $2 billion Smart Schools Bond Act on the November ballot has undergone changes from the original Executive Budget plan. Technology hardware is still included, such as broad connectivity for schools and communities, as well as laptops, whiteboards and student tablets. Construction of permanent classrooms to replace portable instructional space is also included, as is funding for high tech security equipment. Each district would receive a share of the proceeds, based on their proportion of total state school aid (provided voters approve the ballot proposition.) To receive the funds, each district would be required to prepare an investment plan approved by a review board composed of the SUNY Chancellor, State Budget Director and the State Education Commissioner. Districts would be able to transfer their allotment to BOCES or other departments or agencies if they wish to participate in a broader program on their behalf. Equipment provided to students of private and parochial would be loaned in the same manner as textbooks are currently provided.
The governor still plans a multi-year, statewide pre-kindergarten program. In the initial year, $300 million would be provided to New York City, which appears ready to implement an expanded program. The rest of the state would receive $40 million on a competitive basis, with participating districts being reimbursed for certified teachers at the rate of up to $10,000 per year and uncertified teachers at the rate of up to $7,000 per year. If continued unchanged, the five year plan would ultimately provide $1.5 billion in state assistance.
View Side By Side Chart of Budget Proposals, Including Final Agreement
Statement of NYSSBA Executive Director Timothy G. Kremer on the State Budget Agreement
The state’s 2014-15 budget represents a positive step forward for school districts. The $1.1 billion increase in state aid will help preserve educational opportunities for students. We appreciate the upward trend in funding. This marks the third consecutive increase in education funding in the state budget. That said, school district needs remain high. To put things into perspective, even after a $602 million restoration, the GEA is still withholding some $1 billion in state support for public schools. Rather than subsidize state rebate checks, the $344 million earmarked next year for the “tax freeze” would have been better spent by providing increased support to schools.
Moreover, schools have already wrung substantial savings from their budgets. They are sharing business administrators, drama departments, food service directors, pre-K programs, summer school programs, fuel services, even superintendents. They have joined consortiums to save money on health insurance, energy, equipment and supplies. Further cuts will only dig deeper into the bone. Universal pre-K is a laudable goal and NYSBBA supports a plan to get there. We understand the implementation urgency in New York City. Unfortunately, the $40 million allocation for the rest of the state will not allow schools either to provide pre-K to all students or maintain other programs.
Lawmakers enacted prudent reforms to Common Core, providing assurances that students will not be penalized as schools implement the new standards. Most importantly, they kept the teacher and principal evaluation system intact. School districts negotiated these plans in good faith. State-imposed changes in the midst of their implementation would have threatened the integrity of the entire evaluation system.
In the remaining months of session, we look forward to working with lawmakers to enact mandate relief to help schools operate more efficiently and keep property taxes in check – without harming educational programs.
The state budget is truly a mixture of benefits and failures. The final state aid figure is the best we’ve received since the Great Recession and yet we will face at least two more years of the GEA. We were spared tuition tax credits, an APPR moratorium, the jurisdiction of the Division of Human Rights and statewide charter school Building Aid, but are being subjected to new unfunded mandates. Just as importantly, we were provided no new significant mandate relief and badly needed items like regional high schools and new rates for special act districts once again went ignored. While we appreciate the thought behind the improvements included in the Smart Schools Bond Act (and the fact that the final agreement actually limits the proposed funding to schools) relying on the public to approve such a measure is speculative at best, leaving the technological needs of districts to chance and delaying implementation by at least a year. A better approach would have been to take the amount devoted to debt service on the bond and increase computer hardware funding by that amount each year.
Politics appeared to drive this budget process like none before it. More was discussed within the context of the state budget than at any time in recent memory. Proposed state assistance was spread across a vast array of interests in this, an election year. Given the number of negative education related proposals and the insufficient Executive Budget aid proposal, the final budget agreement is a significant advocacy victory for NYSSBA members. Usable state aid was nearly doubled, using funds that (were it not for another advocacy win) would have been swallowed up by tuition tax credits to private schools. In the end, state leaders rejected most new initiatives, fair and foul alike; retreating to the tried and true approach of glossing over needed reform with just as badly needed school aid increases. School districts will be provided a solid overall funding increase, offset by continued funding distribution inequities and the public pressure of tax rebates.
In several areas, we can breathe a sigh of relief. The proposal to provide a Family Medical Leave Act, the prospect of burdensome Common Core implementation requirements, DHR jurisdiction for schools, statewide charter school Building Aid and many other proposed mandates were rejected in favor of more moderate approaches. Taken in total, the negotiations resulted in a collaboration for which we can be grateful. From an advocacy perspective, this state budget negotiation was a prolonged and intense battle. The result was not optimal by any means, but yet it represents a significant victory, both in the harm prevented from befalling our schools and in the increased financial assistance and more reasoned approach taken by the state. Given the sheer number of issues considered under the budget’s umbrella and within its brief time frame, NYSSBA, its members and its allies proved to be a significant influence on public policy. As the association of local, democratically elected school officials, that’s as it should be.
The remainder of the legislative session will no doubt pose major challenges, but state leaders will now pose them knowing that NYSSBA and its members will meet those challenges with sound reasoning and vigorous, dedicated advocacy.